repeat: stuck in an ancient lease

A question was posted regarding an ancient lease causing a section to be HBP by a well in another section. It got lost in infighting and bickering and very little if any helpful posting was done. I was asked to repost my response as I am also impacted by this lease, so that some helpful input would hopefully come along.
To get back to the origin of Jason's post:
1. In 1955 2 families owned large portions of S25, T15N, R115W, S30, T15N, R14W, S28, T15N, R14W, S19, T15N, R14W.
2. These families leased all of the acreage in one lease to Carter Oil Company in April of 1955.
3. Carter oil spud in a well, which began producing in June of 1955 in S18, T15N, R14W.
4. This oil is still producing today and has only shut down for 2 months 3 times and 1 month 4 times.
5. Section 28 was unitized in 1972.
6. The lands in S25T15NR15W and S30T15NR14W have changed hands multiple times over the years. Thus far I have found no reservation of minerals in any of those transactions.
7. The well started by Carter Oil and the leases attached thereto have changed hands multiple times and are now in the hands of Zadeck Energy.
8. There have been severeal releases filed over the years. We plan to look them up @ the court house tomorrow.
9. The people in S25T15NR15W and S30T15NR14W were informed last Wed. that we may be HBP by this 1955 lease that was discovered while title searches were being conducted for S28T15NR14W. To my understanding. If this is true and the minerals were never reserved with land transactions the people impacted may be able to receive royalties based on the 1955 lease (1/8 or 12.5%) however our hope is there has been a release filed at some poin due to the fact that there was never any development or production in S25T15NR15W or S30T15NR14W.
Those in the group who are not impacted by this have signed their letters of intent and are moving forward. Those of us who are impacted hope to resolve it but feel blessed by the possitive change in our community and the friendships made during this whole process.
Any professional input would be welcome but can we please leave the infighting to another post?

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Permalink Reply by Bobi Carr ("parker") on August 24, 2008 at 19:33
Hi Kassi,

Why don't you post the question directly to Mr. McConnel or Mr. Dion Warr's pages.

As far as royalties, I read somewhere (I think in the mineral code) that gas companies are only required to pay for 3 previous years. (If it is in the mineral code - case law may be different).

I am in no way an expert, just trying to give what limited information that I have.

I HOPE THIS TURNS OUT FOR Y'ALL.
Permalink Reply by Coyote Ugly on August 25, 2008 at 3:01
I would get a lawyer and nail this down with him.
Permalink Reply by Natch N3 on August 25, 2008 at 3:42
bump
Permalink Reply by Bobi Carr ("parker") on August 25, 2008 at 9:59
????

bump?
Permalink Reply by Bobi Carr ("parker") on August 26, 2008 at 7:34
Thanks.
Permalink Reply by Dorcheated A1 on August 26, 2008 at 10:08
Heck, I thought that was a pay raise.
Permalink Reply by M. Mcwilliams on August 25, 2008 at 5:49
Would not the biggest problem would be that there was no Pugh clause in these old leases, so that production on any part of the leased tract, or units formed thereon, will hold the lease in effect as to any other part of the tracts, even the noncontiguous lands?
Permalink Reply by Dion Warr, CPL on August 25, 2008 at 7:23
I would agree with you here, M.

No Pugh Clause. Rights held on any portion of the lease (even from production on lands pooled with the leased lands) will hold the lease in its entirety, irrespective of contiguous or non-contiguous lands.

The well holding this is in Sec. 28, or Sec. 18 (typo), maybe?

The mineral servitude(s) subsequently created is/are (a) separate animal(s) from the lease status. You could have subsequent transactions in which the minerals were conveyed along with surface within these sets of tracts, however, they would be ALL subject to the lease if the lease is deemed to have been held in its entirety (if no partial releases exist).

You may be able to break the lease due to lack of Lessee's ability to fully develop, but you would want to document all drilling and/or production which may affect the leased premises (either on or near the leased property). It very well maybe that the actions of others on lands in which the leased acreage was pooled maybe deemed sufficient development (particularly if Carter or assigns participated in such operations).

Considering the stakes of open vs. leased acreage at this time, the successors of the Carter interest would have ample motivation to assert their full lease rights as being maintained, I would assume legally if necessary. You need to get all of these ducks in a row before you fight. Just remember that your counsel would need to verify any mineral history work independently (not to knock you or your research Kassi, but you do have a vested interest in breaking the lease).

Either way, you need a good mineral history done by someone that knows what they are doing, before someone (atty or otherwise) could reasonably tell you how to proceed. Looking at the lease, and the details described, this lease could very well be good enough to stand up to scrutiny, but you need all of the facts to know for sure. Moreover, it probably would still take a judgment to make that determination stick. Could be a very long road.

Good luck.
Permalink Reply by Kassi on August 25, 2008 at 4:12
Yes it is complex. I am a nurse, researcher, business person and negotiator but I am definitely wise enough to know there are times when you must have an attorney. I have an oil and gas attorney who will be reviewing all of the information upon completion of our research if I am unable to get this resolved without legal remedy. Many questions have been raised regarding the accurateness of the claim that our land is HBP with what we have found.
Permalink Reply by insomniacnla on August 25, 2008 at 4:26
Kassi,

The same thing happened to me and my neighbors. I prepared a chain of ownership on our lands and also pulled the deeds which did not show any reservation of the minerals. The landman had a superior sign off on it and they both agreed with me, we owned our mineral rights as there was no reservation in any of the deeds.

My friends and family truly hope that your situation ends favorably for you, your family and neighbors.
Permalink Reply by RAY on August 25, 2008 at 5:12
once a HS lease is signed & paid off.. is it FINAL?
no going back & re-researching?
no 50 yr old leases coming out of nowhere?
Permalink Reply by Bobi Carr ("parker") on August 25, 2008 at 5:21
It depends on whether or not your lease has a title warranty clause. If you warranty title to the Lessor (gas company) and they later find that you do not own the minerals, they are entitled to their money back.

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